Also known as: FRCP 23 · Federal Rule of Civil Procedure 23 · Rule 23 · class action rule
Written by attorneys — see sources below.
A federal procedural rule that prescribes the prerequisites and procedures for certifying and maintaining class actions in federal district courts.
Fiona Foster and hundreds of other policyholders sue Fidelity Trust alleging systematic underpayment of interest on late claim checks. Separate individual suits would produce conflicting rulings on whether the insurer must pay interest under identical contract terms. The court certifies the class because the risk of incompatible standards of conduct for the defendant justifies collective treatment.
Frederick Ferguson files a diversity suit against Franklin Foundry on behalf of numerous suppliers seeking only contractual interest on late payments. State law prohibits class actions limited to interest recovery. The federal court applies the federal class rule to decide certification and permits the class to proceed.
Faith Fitzgerald challenges a state durational residency requirement for divorce on behalf of all recent arrivals. Her individual claim becomes moot after she satisfies the residency period. The court allows the class action to continue because the named plaintiff adequately represented the class at the time of certification.
Carol Sosna married Michael Sosna on September 5, 1964, in Michigan. They lived together in New York between October 1967 and August 1971, after which they separated but continued to reside there. In August 1972 Sosna moved to Iowa with her three children. The following month she petitioned the District Court of Jackson County, Iowa, for dissolution of her marriage. Michael Sosna was personally served when he visited Iowa and made a special appearance to contest jurisdiction. The Iowa court dismissed the petition for lack of jurisdiction under Iowa Code § 598.6 because Sosna had not resided in the state for one year preceding the filing. Instead of appealing, Sosna filed a complaint in the United States District Court for the Northern District of Iowa seeking injunctive and declaratory relief on constitutional grounds. A three-judge court was convened pursuant to 28 U.S.C. §§ 2281 and 2284. While the federal action was pending, the Iowa Supreme Court decided In re Marriage of Williams, 217 N.W.2d 202 (1974), and upheld the statute's constitutionality. The three-judge court upheld the residency requirement. This Court noted probable jurisdiction. During the appeal Sosna obtained a divorce in New York, though custody and support issues remained unresolved from the Iowa proceeding. She returned to Iowa to prosecute the appeal. Sosna sought class certification under Fed. R. Civ. P. 23 to represent Iowa residents who had lived in the state less than one year and wished to initiate divorce actions but were barred by the residency requirement. The parties stipulated that numerous people were similarly situated, joinder was impracticable, her claims were representative, and she would adequately protect class interests. The district court approved the stipulation in a pretrial order.
View caseForrest Falconer brings a class action against Foxfire Biotech that is dismissed with prejudice. A later individual suit by a class member raises the same claims in another court. The dismissal bars the second action because the class judgment carries claim-preclusive effect.
Petitioner Semtek International Inc. filed a complaint against respondent Lockheed Martin Corp. in California state court, alleging inducement of breach of contract and business torts. Respondent removed the case to the United States District Court for the Central District of California on the basis of diversity of citizenship. The district court dismissed petitioner’s claims as barred by California’s 2-year statute of limitations, adopting language suggested by respondent to dismiss the claims “in [their] entirety on the merits and with prejudice.” Petitioner appealed the dismissal to the Court of Appeals for the Ninth Circuit, which affirmed the district court’s order. Petitioner subsequently brought suit against respondent in the State Circuit Court for Baltimore City, Maryland, alleging the same causes of action. These claims were not time barred under Maryland’s 3-year statute of limitations. Respondent removed the action to the United States District Court for the District of Maryland on federal-question grounds, but that court remanded the case to state court. The Maryland state court granted respondent’s motion to dismiss on the ground of res judicata. Petitioner returned to the California federal court and the Ninth Circuit, moving unsuccessfully to amend the earlier order to indicate that the dismissal was not “on the merits.” Petitioner appealed the Maryland trial court’s order to the Maryland Court of Special Appeals. The Court of Special Appeals affirmed the dismissal. After the Maryland Court of Appeals declined to review the case, the Supreme Court granted certiorari.
View caseFelicia Fuentes sues as a shareholder on behalf of Fairfield Bank and moves to proceed without posting a bond. State law requires security in derivative actions. The court holds that the federal class rule governs procedural aspects while the state bond requirement may still apply as a substantive condition.
In 1943 a stockholder owning 100 shares of Beneficial Industrial Loan Corporation, a Delaware corporation doing business in New Jersey, filed a derivative action in the United States District Court for the District of New Jersey against the corporation and its managers and directors. The complaint alleged that since 1929 the individual defendants had engaged in a continuing conspiracy to enrich themselves at the corporation’s expense, wasting or diverting assets exceeding $100,000,000. The plaintiff had demanded that the corporation institute proceedings for recovery, but the individual defendants’ control prevented it from doing so. The plaintiff was one of 16,000 stockholders and held only 100 of the corporation’s more than two million outstanding shares; together with 150 shares held by an intervenor, the combined interest approximated 0.0125 percent of the stock and had a market value that had never exceeded $9,000. The action remained pending when, in 1945, New Jersey enacted a statute requiring a plaintiff with so small an interest to post security for the reasonable expenses, including attorney’s fees, of the defense if unsuccessful and making the plaintiff liable for those expenses. The corporate defendant moved to require a bond of $125,000, pointing to its bylaws that might obligate it to indemnify the individual defendants. The District Court held the state statute inapplicable to the federal action. The Court of Appeals reversed. The Supreme Court granted certiorari.
View caseFatou Fall files a class complaint in federal court and serves the defendant under the federal rule for service. State law prescribes a different method with a shorter limitations period. The court upholds the filing and service because the federal class rule controls the procedural mechanism in federal court.
On February 6, 1963, petitioner, a citizen of Ohio, filed her complaint in the District Court for the District of Massachusetts, claiming damages in excess of $10,000 for personal injuries resulting from an automobile accident in South Carolina, allegedly caused by the negligence of one Louise Plumer Osgood, a Massachusetts citizen deceased at the time of the filing of the complaint. Respondent, Mrs. Osgood's executor and also a Massachusetts citizen, was named as defendant. On February 8, service was made by leaving copies of the summons and the complaint with respondent's wife at his residence, concededly in compliance with Rule 4 (d) (1). Respondent filed his answer on February 26, alleging, inter alia, that the action could not be maintained because it had been brought contrary to and in violation of the provisions of Massachusetts General Laws Chapter 197, Section 9. On October 17, 1963, the District Court granted respondent's motion for summary judgment. On appeal, the Court of Appeals for the First Circuit affirmed. The Supreme Court granted certiorari because of the threat to the goal of uniformity of federal procedure posed by the decision below.
View caseYes. When a federal procedural rule directly conflicts with a state procedural rule in a diversity action, the federal rule controls if it is valid under the Rules Enabling Act. Rule 23 addresses only the procedural question of whether claims may be litigated as a class and does not alter any substantive right created by state law.
Supporting sources
The defendant must have acted or refused to act on grounds that apply generally to the class, making final injunctive or declaratory relief appropriate for the class as a whole. A uniform policy that restricts rights for every class member satisfies this requirement when the injunction would benefit the entire class without individualized determinations.
Supporting sources
Rule 23(a)(2) requires only that there be questions of law or fact common to the class. A single common question suffices even if individual damages or notices differ. A uniform practice applied to every class member creates that common question of fact.
Supporting sources
Rule 23 governs the availability of class certification and displaces the conflicting state statute. The federal rule is valid under the Rules Enabling Act because it regulates practice and procedure without abridging, enlarging, or modifying any substantive right.
Supporting sources
…when Cohen arose can appreciate the strong state policy reflected in the statute. I think it wholly legitimate to view Federal Rule 23 as not purporting to deal with the problem. But even had the Federal Rules purported to do so, and in so doing provided a substantially less effective deterrent to strike suits, I think the…